Austin Real Estate Firm REX Loses Lawsuit Against Zillow

Zillow has won a lawsuit that was brought by an Austin-based real estate brokerage.

A federal court last week ruled in favor of Seattle-based Zillow, roughly two years after REX sued the company, alleging that it violated antitrust and consumer protection laws when it separated certain listings on its website, the Seattle Times reported.

When Zillow joined the National Association of Realtors in 2021, it changed its website to categorize properties for sale into two separate tabs: “agent listings” and “other listings.” The “agent listings” tab displayed properties from multiple listing services, while the “other listings” tab included offerings from sources outside those services.

REX, which marketed homes without using MLS, saw its properties relegated to the “other listings” tab. This change allegedly led to a significant decline in traffic to REX’s listings, prompting the company to file a lawsuit against Zillow and the National Association of Realtors.

REX argued that the separation of listings amounted to collusion between Zillow and NAR to maintain high real estate commissions and limit competition. The lawsuit also alleged violations of the Washington Consumer Protection Act and federal false advertising laws.

A federal judge had previously dismissed REX’s antitrust claims, finding no evidence of a conspiracy between Zillow and NAR. On Friday, a jury went further, denying Rex’s claims of false advertising and ultimately ruling in favor of Zillow on all counts.

Zillow appreciated the verdict, stating its readiness to “focus on helping customers get into their next home.” REX, led by CEO Jack Ryan and backed by venture capital, reportedly closed its residential real estate business in May 2022, in response to the Zillow changes.

—Quinn Donoghue